In the past 12 months, Starbucks reported record revenue and profits, as well as the best quarter in its history. At around $37 per share currently, the firm's stock is up more—than 350% from its 2008 lows.
In the accompanying video, Chairman and CEO Howard Schultz recounts the story of how Starbucks recovered from both "self-inflicted mistakes" and the "cataclysmic" financial crisis, as detailed in his newest book Onward: How Starbucks Fought for Its Life without Losing Its Soul.
After a 15-year "magic carpet ride," where seemingly everything Starbucks touched turned to gold, Schultz says the company started to suffer from "a sense of hubris and entitlement" and became complacent about the stock price and P/E.
In addition, Starbucks embraced "growth as a strategy" — driven by goals set both internally and on Wall Street -- and lost focus on the nearly 60 million customers who visit its 16,000 stores each week.
"There wasn't one thing that created the problem and there wasn't one [thing] to solve it," Schultz says. "We wanted to transform the business financially and make sure we preserved our values and guiding principles."
Check the accompanying video to hear how Starbucks battled to find what Schultz calls "the fragile balance between profitability and social conscious," how a trip to New Orleans in 2008 "galvanized" the company and the advice Schultz got from Michael Dell, another founder who returned to the CEO role after a long hiatus.
Editor's note: Stay tuned for additional segments featuring Schultz's views on the economy, America's business environment and his answers to your questions.
- CEO Howard Schultz
- Wall Street
- Michael Dell